The analysis of market knowledge competence effect and research & development (R&D) toward the policy making of new product development

Abstract

The increasing mobility of people without adequate provision of mass transportation infrastructures makes people choose private transportation like motorcycles. Such circumstances lead the motorcycle manufacturers in Indonesia competing to develop their products to meet the needs of customers. In addition, the new regulation of Central Bank of Indonesia dealing with the credit advances has raised the intense competition of motorcycles industries in Indonesia. One of the ways to win the competition is by developing new and improved products. In developing and improving the products, companies need to consider resource utilization. In this research, researcher utilizes the resources that exist both inside and outside the enterprise such as customer demands, intensity of competition, perception of the importance of market knowledge, importance of market competence, and internal R&D as well as external R&D is expected to develop new products that are superior. The study involved 150 employees as respondents. The method used in the study is Structural Equation Modeling (SEM) with AMOS 20.0 statistical software. The result shows that the demands of the customers and the intensity of competition lead to a positive effect on market knowledge competence, while the perception of the market knowledge importance does not influence the development of new products, and market knowledge competence, internal R&D and external R&D have positive effect on the development of new products.